Juliana ADDISON (Wendouree) (12:16): I too am pleased to rise to contribute to the debate today in support of the Commercial and Industrial Property Tax Reform Bill 2024. The reason I am so pleased to do it is because this legislation provides a sensible and comprehensive approach to transitioning over time to an annual commercial and industrial property tax as a replacement for stamp duty currently levied on commercial property sales across Victoria, and I am pleased that the opposition are supporting it.

It is great to follow on from the member for Preston, who made a very, very solid contribution, and he has addressed a number of views about the member for Sandringham’s proposed amendments to this bill. I just have to say that I concur with the member for Preston, and what he said about those amendments is exactly what I think.

I am going to get on with talking about the bill that we are introducing and why we think this is so important and beneficial to Victorian businesses, Victorian jobs and all Victorians. First and foremost, I would like to thank the Treasurer and his office as well as the Treasury for the work they have done in bringing this bill to the house. This is a landmark reform, and that is what this government is known for, landmark reforms. This is another one that we are very proud to be putting to the Parliament today, and it will bring in billions of dollars of economic benefit to Victorians and Victorian businesses. I really want to acknowledge and recognise all the efforts of those involved because landmark reforms are so important to us who believe that Victoria needs to keep moving forward and be a reforming state as we are a reforming government.

In terms of thinking about the context and the consequences of this bill that is before the house, under the current arrangements stamp duty, officially known as land transfer duty, is an up-front cost for acquiring a commercial property in Victoria. The lump sum in effect discourages industrial investment and growth, thereby hindering development and employment opportunities more broadly, which is why we are proposing that we transition to a fairer annual system that will prove beneficial for Victorians.

I was really interested to learn that there are over a quarter of a million commercial and industrial properties in the state of Victoria, and the associated stamp duty contributes to around 15 to 20 per cent of land transfer duty revenue. Reforming this system is significant, and mitigating the short-term budget impact requires a gradual approach, with this bill proposing a transition period of 10 years at a minimum. This approach will result in up to $50 billion in cumulative economic growth in net present value terms, yet it will also be broadly revenue neutral in the long term, which is something that everyone will be very pleased about. Acting Speaker Farnham, I am sure you are pleased about that revenue-neutral aspect of this great reform.

How are we going to achieve this? What the legislation under consideration today proposes is a new act. Often in this place we are just amending an act. This is a brand new act.

A member interjected.

Juliana ADDISON: It is exciting – a brand new act, a brand new law, not a change. The Commercial and Industrial Property Tax Reform Act 2024 is defined as a taxation law to be administered by the State Revenue Office under the Taxation Administration Act 1997 and is slated to commence this year from 1 July.

I would like to give a shout-out to the State Revenue Office workforce, many of whom are based in my electorate at our beautiful GovHub building. I visited recently with Minister Williams, the Minister for Government Services. Some of the parents whose kids my kids go to school with work at the SRO. A couple of girls I went to school with also work at the State Revenue Office. It is a really great example of decentralisation and supporting jobs in the region. The State Revenue Office does a great job and creates really well paid, good jobs in the heart of my community, which is what this government is about – supporting regional Victorians.

The bill that is before us proposes reforms to the taxation of commercial and industrial property as defined by the Australian valuation property classification codes. I knew nothing about these codes before this, but now I am across them. A range of different codes are included. Commercially classified properties have codes between 200 and 299, industrial properties have codes from 300 to 399, extractive industries have allocated codes from 400 to 499 and industrial infrastructure and utilities have codes between 600 and 699. Interestingly, these codes are already in use for council rates and other uses. These codes are going to be part of it.

Another thing that I was interested to learn is that certain student accommodation locations, including those run as private ventures and not by a university or tertiary college itself, will be subject to these reforms. Mixed-use properties on one title are eligible if they are either solely or primarily commercial or industrial. I am learning stuff every day that I am this place, Acting Speaker Farnham, as I am sure you are.

Let us talk about what we are going to do as we begin this important landmark reform. While these reforms will begin from the middle of this year, in 2024, the commercial and industrial property tax itself will not begin for another decade – it will be interesting to see how many of us are still here in 10 years time – under a proposed gradual transition. This 10-year period commences when a property is considered to have entered the reform. There are a few criteria for this, and I want to make sure we understand what the criteria are – a contract entered into on or after 1 July 2024 with at least 50 per cent of non-exempt property transacting and with that property having a qualifying commercial or industrial use at the time of settlement. I hope it is really clear to everyone what that is. If these criteria are met, the property is liable for one final instance of stamp duty and then 10 years afterwards becomes liable for the annual commercial and industrial property tax.

What this bill also does is introduce transition loans to finance the final stamp duty payment as an option – and I really want to stress that it is an option – for eligible Australian citizens, residents and businesses seeking an alternative to the lump sum payment. These transition loans will help Victorian businesses to free up capital for investing in and growing their businesses, including creating jobs for Victoria.

As the daughter of a small business man, I know how important that freeing up of capital is for people running small businesses. Small businesses are very much the heart of Ballarat; they are the drivers of my local economy. I know that going forward this will be an option for a number of small businesses to really help them kickstart their ventures.

Of course it is important that we have accountability measures with these loans, so these loans will be provided according to a strict assessment criteria by the Treasury Corporation of Victoria and repaid with interest across 10 annual payments so they are fully repaid prior to the property tax commencing. But – another important point – if the property is sold during this time, because 10 years is a long time, then the borrower must repay any remaining balance prior to settlement as the debt cannot transfer with the property. I guess it is just like when you sell a house, you need to pay off the mortgage and settle all of that – all that needs to be acquitted – before the transaction can go through.

I am running out of time on this interesting bill. There was so much that I wanted to talk about, but I am going to quickly summarise some of the other important parts of this reform, including providing some additional clarification concerning various aspects of these reforms.

For example, a qualifying transaction for entering the reform can be a sale but it can also be the subdivision of a property already entered into the reform or a consolidation of multiple properties with over 50 per cent already entered. In these situations the resulting property would inherit the entry date of the parent properties rather than beginning a new 10-year date.

There is so much to talk about, but I want to say that a number of other acts will be amended, including the Duties Act 2000; the Taxation Administration Act 1997; the Treasury Corporation of Victoria Act 1992; the Heritage Act 2017; the Retail Leases Act 2003, which importantly clarifies that property tax cannot be passed on to the retail tenant; as well as the Property Law Act 1958 and the Sale of Land Act 1962.

In closing, I welcome the introduction of the Commercial and Industrial Property Tax Reform Bill 2024.

You can take a look at more of my speeches to Parliament here.